Amidst the battle between Ola and Uber, Meru Cabs has raised $25 million in its latest funding round. The fund comes from Brand Capital, an investment arm of Bennett, Coleman and Co.
With the newly infused capital, the company aims to further strengthen its foothold in the Indian market. It will be focusing on providing quality service based on a sustainable business model.
It will use around 76% money for advertising and providing user incentives, including discounts, loyalty schemes and providing quality service. It is looking to have 15-17% of the total market share that will make it a $1 billion company by 2022.
This is just the first leg of the company’s $100 million fund-raising plan. It will further raise additional $75 million. Previously, in March 2015, it raised $50 million from India Value Fund.
Siddhartha Pahwa, CEO of the company, said,
Sixty-seventy per cent of the money will be used for advertising and providing user incentives which would include discounts, loyalty schemes and providing quality service. We are looking to have 15-17% of the total market share that will make us a $1 billion company by 2022.
Since its $50 million funding round, it has expanded its services to 24 additional cities. Apart from that, it also launched four unique services, and grown its fleet size to 20,000 vehicles.
Meru Cabs, which was launched in 2007 as an AC radio cab service, now competes with highly funded Uber and Ola. It currently operates in 23 cities and has an operational fleet of 20,000 taxis, 5,000 of which are company-owned.
The firm is looking to increase its fleet by 15 to 20 percent over the next one year and will own 25% of the inventory. It is planning to be present in 45 cities by end of 2018.
Meru was the first taxi service provider to introduce carpool service in India. It has also signed a global alliance with Taxis G7 to launch eCab in India.
It has also launched a specialised service for differently abled and elderly commuters called Meru Enable. The company has about 4.5 million users and is looking to clock Rs.850 crore in revenue in the current financial year.
As per industry estimates, India’s organised taxi-hailing market is worth $1.2 billion. It is estimated to reach $15 billion by year 2022.
Shrenik M. Khasgiwala, director, Brand Capital, said,
This partnership will help accelerate the process of creating the requisite brand positioning as well as awareness for customers who are present across mediums/platforms like Print, OOH, digital, social media, etc.